Managing the economic transition

Northern Ireland’s economy must manage the transition to high value added activity to build a vibrant and prosperous economic future.

That was the message from Economy Minister Nigel Dodds following the release of the latest Northern Ireland Economic Bulletin.

While the Northern Ireland economy continues to support historically high levels of employment and low levels of unemployment, significant structural weaknesses remain in lower levels of productivity and private sector earnings, high levels of economic inactivity and the relatively small private sector.

These issues are considered in the third edition of the Northern Ireland Economic Bulletin published today by the Department of Enterprise Trade and Investment. The Bulletin brings together a range of research findings and commentary on economic issues facing Northern Ireland to inform the economic debate.

Commenting on the publication, Economy Minister Nigel Dodds said: “There are welcome signs that Northern Ireland’s economy is continuing to sustain higher than ever levels of employment and benefiting from low unemployment. These gains are impressive when compared to the UK.

“Tourism is increasingly making an important contribution to the economy and has considerable potential to play an even greater role in the years ahead.”

The Minister continued: “All modern economies must manage the transition to high value added activity and I have no doubt that Northern Ireland businesses have the potential to seize the opportunities available and compete successfully in a global environment. The goal is a vibrant private sector, which is much more export oriented.”

“It is also recognised that alongside these positive indicators there are also structural weaknesses that must be addressed. We are all agreed that the workforce needs to be better qualified; the private sector needs to embrace R&D and innovation; we need to embrace a culture of enterprise, and our infrastructure needs to meet the demands of the 21st century.”

Mr Dodds concluded: “It is also clear that as the Assembly starts its work, the economy has now moved centre stage in terms of the policy agenda. Together with Ministerial colleagues, the Assembly Enterprise Committee, the business community and other social partners, I am committed to enabling the private sector to achieve its full potential.”

The Bulletin reports:-

• At 4.3% (February-April 2007), unemployment remains well below the UK average (5.5%) and Northern Ireland jobs growth over the ten year period 1996-2006 (21%) has outstripped that in the UK (13%).
• A detailed study of the economic role of tourism in Northern Ireland has shown that the industry contributed 3.5% Gross Value Added to the economy in 2003 and some 24,200 jobs are supported by it. There is considerable potential for growth in business and holiday visitors relative to the UK and Ireland.
• A European wide survey covering the period 2002-04 showed that Northern Ireland businesses performed better than the European average in terms of innovation activity and was ranked 11th out of 29 comparator countries.
• In 2005, the most recent year for which whole economy figures are available, nominal growth in the NI economy (measured by Gross Value Added (GVA)) was 3.8%, close to the UK rate of 3.9%.
• Northern Ireland GVA per head of population remains well below the UK average and in 2005 was 80% of the UK figure, and much of this is due to lower productivity (82% of the UK level) and a lower employment rate.
• However, even if Northern Ireland had the same productivity as the UK, around 40% of the productivity gap would remain due to higher concentrations in lower productivity sectors, such as retail and construction, where much of the recent employment growth has occurred.
• The number of jobs in the Service sector increased by almost 131,000, a rise of nearly 30% and higher than the overall growth in jobs in NI over the period 1996-06. 4 out of every 5 jobs in NI are now in the Service Sector.
• Manufacturing jobs have fallen significantly over the same period (by 21,600 or 19.4%) and this has been particularly marked in the last five years (by over 13,500 or 13.7%). Manufacturing exports growth has also slowed in recent years (0.6% in 2005-06).

The Bulletin covers a range of other topics including Northern Ireland competitiveness, the debate on Corporation tax, recent progress in telecoms and what sustainable development means for Northern Ireland.

NOTES TO EDITORS:

1. An electronic copy of the new Economic bulletin can be found on the DETI website: http://www.statistics.detini.gov.uk/
2. General enquiries about the Economic Bulletin should be sent to statistics@detini.gov.uk or made to DETI Statistics Research Branch,Tel: 028 9052 9655.
3. Media enquiries should be directed to the DETI Press Office on telephone 028 9052 9604
4. During out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.